HomeMy WebLinkAbout5.D.2. Authorize Repurchase Agreement for the John Deere 5425 Tractor
CITY OF SHAKOPEE S. IJ. L .
MEMORANDUM CO~JSE~IT
TO: Mayor & City Council
Mark McNeill, City Administrator
Bruce Loney, Public Works Director
FROM: Michael Hullander, Public Works Supervisor
DATE: September 19, 2006
SUBJECT: Request to utilize repurchase agreement for the John Deere 5425 Tractor.
INTRODUCTION:
Public Works is requesting council authorization to utilize the repurchase agreement from
Siemon Implement, Inc for the 5425 tractor. The estimated cost of this repurchase is
$8,520.00.
BACKGROUND:
Public Works has been using repurchase agreements with Siemon Implement, Inc. for a
number of years and find them to be of excellent value to save tax dollars on maintenance
costs and downtime. All vehicles Public Works purchases through these agreements are
covered with full warranties. Public Works currently has agreements with Siemon
Implement, Inc. on three John Deere 1445 Mowers and three John Deere 5425 Series
Tractors.
Below is the agreement with the costs to date, our estimated additional hours, and
estimated final costs.
John Deere 5425 Tractor:
Trade every 18 months for $3,500.00 up to 250 hours and $10.00 per every
additional hour after 250 hour.
Current hours: 690
-250
440 additional hours x $10.00 I per additional hour = $4,400.00
+ $3.500.00
Current Total $7,900.00
Estimated additional hours until trade: lOx $10.00 / per additional hour $100.00
Subtotal $8,000.00
Tax $520.00
Total estimated cost of trade $8,520.00
Internal Service Fund rental rate 18 months $8,288.00
Public Works can only estimate the cost atthis time. Siemon Implement, Inc. needs to
know if we are going to use the a~reements so they can order the equipment.
AL TERNA TIVES:
1. Authorize staff to use the agreement.
2. Deny the request.
3. Table for additional information.
RECOMMENDATION:
Staff recommends alternative No.1.
ACTION REQUESTED:
Move to authorize staff to use the repurchase agreement with Siemon Implement, Inc. on
unit #134 a John Deere 5425 Tractor with the total cost not to exceed $8,520.00.
~.~
Michael Hullander
Public Works Supervisor